Most statutes establishing benefits or standards for workers were written
with the traditional employeea full-time, permanent workerin mind.
The large and growing number in flexible staffing arrangements, however, has
sparked concern that existing law is inadequate to protect these workers. A
related concern is that, although businesses have many legitimate reasons for
using alternative arrangements, legal loopholes provide an added incentive to
use these arrangements in order to circumvent certain labor standards.

The current situation does not entirely favor business, however. Whether
workers in flexible staffing arrangements are covered under various laws is
often ill-defined. In the absence of clear legal language, employee coverage
and employer liability is being determined by the courts, which often apply
different standards to different laws and sometimes even different standards to
the same law. Such ambiguity causes considerable confusion and legal expense
for businesses.

Whether and how workers in flexible arrangements are covered by various
labor standards turns on whether they are defined as covered employees and
exactly who their employer is under a particular law. For this reason, I begin
by providing some background on the legal issues concerning the definition of
employees and employers when flexible staffing arrangements are used. Next, I
discuss policy issues raised by flexible staffing arrangements within the major
employment program areas and areas of employment law.